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Is Nuveen ESG LargeCap Growth ETF (NULG) a Strong ETF Right Now?
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Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG LargeCap Growth ETF (NULG - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $748.32 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG is managed by Nuveen. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index.
The TIAA ESG USA Large-Cap Growth Index is comprised of equity securities of large capitalization companies listed on US exchanges & meet ESG criteria & exhibit overall growth style characteristics based on long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate, long-term historical EPS growth trend & long-term historical sales per share growth trend.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.12%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
NULG's heaviest allocation is in the Information Technology sector, which is about 44.10% of the portfolio. Its Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.49% of the fund's total assets, followed by Tesla Inc (TSLA - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 38.78% of total assets under management.
Performance and Risk
The ETF has lost about -28.61% and is down about -10.53% so far this year and in the past one year (as of 05/19/2022), respectively. NULG has traded between $48.91 and $74.13 during this last 52-week period.
The fund has a beta of 1.11 and standard deviation of 25.89% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.85 billion in assets, iShares ESG Aware MSCI USA ETF has $22.45 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Nuveen ESG LargeCap Growth ETF (NULG) a Strong ETF Right Now?
Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG LargeCap Growth ETF (NULG - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $748.32 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG is managed by Nuveen. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index.
The TIAA ESG USA Large-Cap Growth Index is comprised of equity securities of large capitalization companies listed on US exchanges & meet ESG criteria & exhibit overall growth style characteristics based on long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate, long-term historical EPS growth trend & long-term historical sales per share growth trend.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.12%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
NULG's heaviest allocation is in the Information Technology sector, which is about 44.10% of the portfolio. Its Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.49% of the fund's total assets, followed by Tesla Inc (TSLA - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 38.78% of total assets under management.
Performance and Risk
The ETF has lost about -28.61% and is down about -10.53% so far this year and in the past one year (as of 05/19/2022), respectively. NULG has traded between $48.91 and $74.13 during this last 52-week period.
The fund has a beta of 1.11 and standard deviation of 25.89% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.85 billion in assets, iShares ESG Aware MSCI USA ETF has $22.45 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.